Though the summer promotion period of online travel agencies has entered its countdown stage, the fierce competition among such online travel websites as Elong, Lvmama and Qunar are still ongoing. Many websites have launched promotion products, like "Summer Special Offers", "Flash Sale", "Special Ticket" and "Super Value Hotel". Meanwhile, the competition of "1-Yuan Ticket" and "Free Visa" has gotten upgraded. On August 16, a website introduced a RMB 799 yuan round-trip ticket for self-service travel from Beijing to Hong Kong, with as low as 92 percent discount. In addition, 98 percent discount for local self-service travel and hotel reservation lower than 70 percent off are also available. It can be said that the online travel agencies) (OTA) are willing to lower prices and sacrifice profits to snatch tourists and win commercial opportunities in the online travel market.
More efforts have been paid by venture investment to online travel; in addition, merger and financing have been accelerated. It is reported that more than 39 investment and financing events occurred to domestic online travel in the first half of the year, with the investment and financing amount exceeding RMB 5 billion yuan. On August 7, Priceline, the tycoon of US online travel, became a shareholder of Ctrip, the leading one in domestic online travel by right of USD 500 million. Insiders believe that the cooperation is likely to change the pattern of domestic online travel market and also serves as a beginning for domestic travel enterprises going global, thus, breaking the vicious circle of low-price competition in domestic online travel market.
"Burning money" with backing of capital
In this year's summer sales promotion, "one-yuan ticket" seems to be the definite "standard" for online travel service providers to compete with each other. The reporter has learned that the "one-yuan ticket" initiated by LY.com has spawned numerous imitators in the industry, and even Qunar has involved itself in the fierce competition war with "0-yuan Lively Scenic Spot", grabbing the opportunities to take a preferential share in the domestic leisure travel market. Online reservation of scenic spots' entrance ticket has been considered as the most promising business in the tourist industry following the reservation of hotels and air tickets.
An online operator believes that the intense competition of entrance ticket implies the fight for tourist flow and the tremendous driving effect. The implementation of such stimulus policies as discount or free entrance tickets prolongs tourists' duration of stay, thus generating repeated consumption, the ultimate industry-chain benefit incurred from which far exceeds the value incurred by entrance tickets.
Focusing on entrance ticket products, OTA, which has stirred various "capital campaign" since the beginning of the year all attempts to be a "winner" in the violent price scrimmage. According to Lvmama, it has contributed RMB 200 million yuan's subsidy at the mobile terminal in the summer sales promotion, while Ctrip has also invested over RMB 100 million in the promotion activity of "one-yuan entrance ticket". It is acknowledged that Qunar has made its promotion by the means of returning cash for the reservation of hotels in summer and the total returning amount will fetch up to RMB 100 million yuan.
Behind the competition of online travel is set to be the intervention of capital and heavy investment. After the investment in Qyer and "zls365", Alibaba further invested Baicheng. com., a domestic travel website, with USD 20 million's of broadband capital in March, while Tencent has already been a shareholder of LY, Elong and Lvmama. By virtue of its own capital and flow merit, Baidu has taken over Qunar. Meanwhile, the industry has become the favor of more and more e-business tycoons. For example, Suning has created the "Suning Tour" with nearly RMB 100 million, initiating the brand-new O2O mode of travel. In addition, JD.com purchased the online hotel reservation platform, "HotelIVP" at the beginning of the year and announced its focus on medium- and high-end travel service after six months.
Win-win cooperation
According to the comparison of the domestic travel market, it is not difficult to find that though online tourism has witnessed rapid growth, but it has failed to be the "mainstream". Tourism revenue of China in 2013 lingered around RMB 2.94 trillion yuan, while online travel accounted for less than 10 percent. Wu Wenxue, the deputy director of China National Tourism Administration, said at the southwest region conference for controlling the travel market order held at the end of July that online travel enterprises was an emerging force in tourist industry and such enterprises as Ctrip, Elong, Qunar, Tuniu, and LY had seen rapid development under the positive intervention of capital market and China National Tourism Administration encouraged and supported the development and growth of online travel enterprises operated in accordance with the laws.
Tang Yibo, the president of "zls365", an online travel sharing platform, said in an interview that online travel falls into three modes; the first mode is store self-management mode represented by Ctrip, including such up-rising stars as LY, Tuniu and Lvmama; the second mode is platform shop, like "Trip.Taobao", mainly operating by charging transaction fees and flow fees; the third mode is such media mode as Qunar and Kuxun, also known as price comparison mode.
"Whatever the mode is, online travel enterprises should all lay emphasis on users' experience, pay close attention to those consumers who are "wealthy and free" and gain the market by excellent quality and low price. However, online travel has been exposed to the "current situation" of being "small-sized, loose and disorderly". Tang revealed that a majority of online travel service providers are under money-losing operation. The primary condition for solving the problem is to standardize the industry and establish standard service system in terms of product pricing, which is bound to lead to losing some revenue for enterprises. However, in a long-term perspective, the benefits caused by transparency of product pricing far outweighs its disadvantages.
"Equal attention should be paid to counseling, guidance and investigation and treatment in the market surveillance", Wu Wenxue said. The National Tourism Administration will strictly investigate and punish these behaviors disturbing the travel market by some false travel websites. In addition, online travel enterprises should undertake the obligations of guaranteeing the interest of tourists, make joint efforts to establish fair and orderly online travel market environment. The reporter has found that such differentiated leisure travel products as "weekend's excursion", "self-driving travel" and "in-depth local tour" are a promising market niche with great profit potential; thus providing accurate and meticulous service will be the key for enterprises to break the current dilemma.
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